ESG: Regulations Summary

The three European Supervisory Authorities (ESAs) have issued a joint consultation paper outlining proposed changes to the disclosure structure established by the Sustainable Finance Disclosure Regulation (SFDR).

Following a mandate from the European Commission in April 2022 to review and revise SFDR's regulatory technical standards (RTSs), one of the ESAs' recommendations is to expand the existing list of principal adverse impacts' (PAIs) universal social indicators to include disclosures such as interference in trade union formation. The ESAs have also advocated improving existing indicators, methodology, and calculation formulae, as well as product disclosures relating decarbonisation targets.The paper outlines technical revisions to the SFDR Delegated Regulation, such as improvements for disclosures on how sustainable investments ‘do not significantly harm’ the environment and society.